VICTOR:
Well, firstly the price you're proposing. Would that be variable
depending on currency fluctuations? The issue is that we're in an
unstable environment at the moment - the exchange rate could affect us
negatively.

JOHN: Us too!

VICTOR: True, but the problem is that we're tied to the U.S. dollar.

LIN: We could consider hedging against currency in both directions.

SUE: That would be acceptable.

VICTOR:
Another problem we may have is that of supply. Our customers often need
supply at short notice. If we do get large orders, we need to guarantee
delivery - so we need to stockpile. The difficulty there is the capital
outlay. How would you feel about a partial offset against our sales?

JOHN: You mean a loan.

VICTOR: I suppose so.

SUE: Would you be agreeable to a deferred payment? We can provide security of course.

LIN: I think that would be acceptable. Unfortunately, I would need to get Board approval for it.

SUE: Of course.

VICTOR: Then I think we might have a deal!

LIN: In principle.

JOHN: Time to celebrate!

In negotiations, it's usual for each side to
have conditions that make the deal better, or safer for them. A
condition is a change in the terms of a deal which is necessary before
one side or the other agrees.

Yes, well, we're prepared to consider your offer Ms Chan, if you can accept some conditions.

He is signalling to the other side that there is a chance for agreement
by using the word 'consider', which means 'think about'.

He then makes this conditional by saying 'if you can accept some
conditions'. In English, using the word 'if' in this way is called a
conditional.
Victor is saying 'We can consider your offer if you can accept some
conditions.' One part of the sentence is conditional on, or depending on
the other.
The negative is also true. If they can't accept the conditions, Victor can't consider the offer.

Notice that Sue adds: 'subject to consideration by the board'. 'Subject
to' is another type of conditional phrase. She means 'We can agree if
the board agrees.' 'Subject to' is a legal phrase meaning 'only if', or
'only after'. There are a number of expressions you can use when giving
a condition. Try them after me:

...subject to the board's agreement.

...conditional on the board's agreement.

...providing that the board agrees.

...as long as the board agrees.

...on condition that the board agrees.

Let's look now at Victor's first condition.

Firstly the price you're
proposing. Would that be variable depending on currency fluctuations?
The issue is that we're in an unstable environment at the moment - the
exchange rate could affect us negatively.

When Victor is talking about conditions - he is exploring various scenarios - or things that could happen.

Notice that he explains what the problem is... He says 'The issue is that we're in an unstable environment.'

'The issue' means the problem, or the thing that needs discussing.

Practise with Victor some ways of introducing a problem.

The issue is the exchange rate.

The problem is the exchange rate.

The difficulty we have is with the exchange rate.

One thing that could happen is that the
exchange rate, the amount of money you can exchange in one currency for
another, may change. Notice that Victor uses the words 'would' and
'could'.

'Would' is like a conditional. One thing might result in another thing happening.
The exchange rate might change.

Victor is talking about the price for their product. He asks 'would that
be variable depending on currency fluctuations'. 'Fluctuations' are
changes. We can express this another way:
'If the currency changes, will the price change?'
'Could' is used to express a possibility - something that might happen.

Victor says 'the exchange rate could affect us negatively'.
Notice that you can say something will affect you negatively - it will
have a negative, or bad effect, or positively - it will have a positive ,
or good effect.

What is Lin's response to this first condition, or concern of Victor's?

We could consider hedging against currency in both directions.

That would be acceptable.

Like Victor, Lin is being careful. She uses the
word 'consider' rather than just agreeing. She's waiting until the
whole deal is clear.

We can give both questions and answers using these 'could' and 'would' phrases. Practise them after Lin and Victor.

Would you consider hedging against currency?

Would you agree to hedging against currency?

We could consider hedging against currency.

We could agree to hedging against currency.

Sue comments: 'That would be acceptable'.
'Acceptable' simply means 'able to be accepted'. They can agree to this
solution. Practise with Sue some phrases you can use to agree, and
disagree, to conditions.

That would be acceptable.

We can agree to that.

We would be agreeable to that.

That wouldn't be acceptable I'm afraid.

I'm afraid we can't agree to that.

We wouldn't be agreeable to that.

Notice that to 'agree with' someone, is to think they are right. To 'agree to' something, is to accept a proposal.

What is Victor's second condition? Let's see.

If we do get large orders,
we need to guarantee delivery - so we need to stockpile. The difficulty
there is the capital outlay. How would you feel about a partial offset
against our sales?

You might use the phrase 'how would you feel
about' something if you think it may be a difficult condition for the
other side to accept. Sue puts this proposal a different way.

Would you be agreeable to a deferred payment? We can provide security of course.

I think that would be acceptable. Unfortunately, I would need to get Board approval for it.

Sue uses the phrase 'would you be agreeable'.
'Would you be agreeable to a deferred payment.' A deferred payment is
when you pay later for something you buy. Lin thinks this condition is
acceptable, but she makes it conditional on Board approval by saying 'I
would need to get Board approval.' Notice the stress on 'would'.
Practise some phrases you can use for this type of condition.

That would have to have Board approval.

The Board would need to approve that.

That would be subject to Board approval.

Sometimes conditions depend on other conditions. One side might say, 'we agree to your condition if...'

So it's very important when negotiating to listen for words that signal a
condition: words like 'if', 'could','would', 'provided' or 'providing',
'as long as' and 'subject to'.

And words that might signal a problem, such as 'problem', 'unfortunately', and 'however'.

Notice that even at the end, they are being careful about what they say.

Then I think we might have a deal!

In principle.

Lin agrees 'in principle'. This means they have
agreed on terms among themselves, but as she needs Board approval, she
can't authorise the agreement right now.

And right now we've reached the end of today's program. See you next time on the Business of English.